J. Philip started in business on 1 January 2015 with £60,000 in a bank account. Unfortunately, he did not keep proper books of account. He must submit a calculation of profit for the year ending 31 December 2015 to the Inspector of Taxes.
At 31 December 2015 he had inventory valued at cost £12,000; a van which had cost £13,500 during the year and which had depreciated during the year by £3,000; accounts receivable of £24,000; expenses prepaid of £600; a bank balance of £51,000; a cash balance £450; trade accounts payable £12,000; and expenses owing £1,200.
His drawings were: cash £750 per week for 52 weeks, cheque payments £1,500. Draw up statements to show the profit or loss for the year.